67 F.

3d 294

NOTICE: Fourth Circuit Local Rule 36(c) states that citation

of unpublished dispositions is disfavored except for establishing
res judicata, estoppel, or the law of the case and requires
service of copies of cited unpublished dispositions of the Fourth
Circuit.
CAROLINA PIZZA HUTS, INCORPORATED; Pizza Hut of
New Bern,
Incorporated; Outer Banks Pizza Hut, Incorporated; Pizza
Hut of Elizabeth City, Incorporated; Pizza Hut of
Goldsboro, Incorporated; Pizza Hut of Greenville,
Incorporated; Pizza Hut of Havelock, Incorporated; Pizza
Hut of Henderson, Incorporated; Pizza Hut of Jacksonville,
Incorporated; Pizza Hut of Kinston, Incorporated; Pizza
Hut of Morehead City, Incorporated; Pizza Hut of Roanoke
Rapids, Incorporated; Pizza Hut of Rocky Mount,
Incorporated; Pizza Hut of Tarboro, Incorporated; Pizza
Hut of Wilson, Incorporated; Pizza Hut of Wrightsville
Beach, Incorporated; Plaza Pizza Hut, Incorporated; South
Wilmington Heights Pizza Hut, Incorporated; Wilmington
Pizza Huts, Incorporated; Delco Store # 154, Incorporated,
Plaintiffs-Appellants,
v.
Billie Lea WOODWARD, Executrix of the Estate of Philip D.
Woodward, Defendant-Appellee,
and
Philip D. Woodward, Estate of the foregoing, Defendant.
CAROLINA PIZZA HUTS, INCORPORATED; Pizza Hut of
New Bern,
Incorporated; Outer Banks Pizza Hut, Incorporated; Pizza
Hut of Elizabeth City, Incorporated; Pizza Hut of
Goldsboro, Incorporated; Pizza Hut of Greenville,
Incorporated; Pizza Hut of Havelock, Incorporated; Pizza
Hut of Henderson, Incorporated; Pizza Hut of Jacksonville,

Incorporated; Pizza Hut of Kinston, Incorporated; Pizza

Hut of Morehead City, Incorporated; Pizza Hut of Roanoke
Rapids, Incorporated; Pizza Hut of Rocky Mount,
Incorporated; Pizza Hut of Tarboro, Incorporated; Pizza
Hut of Wilson, Incorporated; Pizza Hut of Wrightsville
Beach, Incorporated; Plaza Pizza Hut, Incorporated; South
Wilmington Heights Pizza Hut, Incorporated; Wilmington
Pizza Huts, Incorporated; Delco Store # 154, Incorporated,
Plaintiffs-Appellees,
v.
Billie Lea WOODWARD, Executrix of the Estate of Philip D.
Woodward, Defendant-Appellant,
and
Philip D. Woodward, Estate of the foregoing, Defendant.
Nos. 94-2522, 94-2553.

United States Court of Appeals, Fourth Circuit.

Argued June 7, 1995.
Decided Sept. 29, 1995.

Appeals from the United States District Court for the Eastern District of
North Carolina, at New Bern. James C. Fox, Chief District Judge. (CA93-8-4-F, CA-93-128-4-F)
ARGUED Trawick Hamilton Stubbs, Jr., STUBBS, PERDUE &
WHEELER, P.A., New Bern, North Carolina, for Appellants. Robert
Harry Tiller, PARKER, POE, ADAMS & BERNSTEIN, L.L.P., Raleigh,
North Carolina, for Appellee. ON BRIEF: James M. Ayers, II, Gary R.
Perdue, STUBBS, PERDUE & WHEELER, P.A., New Bern, North
Carolina, for Appellants. Robert W. Spearman, PARKER, POE, ADAMS
& BERNSTEIN, L.L.P., Raleigh, North Carolina; Michael P. Flanagan,
Louise W. Flanagan, WARD & SMITH, P.A., Greenville, North Carolina;
Warren W. Davis, Keith D. Price, DAVIS, DAVIS, KASNETZ &
GREENBERG, L.C., St. Louis, Missouri, for Appellee.
Before ERVIN, Chief Judge, WILKINS, Circuit Judge, and JACKSON,

United States District Judge for the Eastern District of Virginia, sitting by
designation.
OPINION
ERVIN, Chief Judge:

The declaratory judgment action underlying this appeal involves a suit by

twenty Pizza Hut corporations against stockholder Billie Lea Woodward, the
executrix of the estate of her husband, Philip D. Woodward. The plaintiff
corporations sought the transfer of the estate's share of the corporations
pursuant to two stock redemption agreements executed prior to Mr.
Woodward's death. In this appeal, the plaintiffs challenge the district court's
award of post-judgment interest to the defendant. On cross-appeal, Woodward
contends that she should have been awarded the incidental benefits of stock
ownership for the period from February 15, 1994, the date of the lower court's
initial judgment, through the dates of the stock's transfer. Concluding that the
actions of the district court came within its authority under 28 U.S.C. Sec.
2202, we affirm.

I.
2

In January 1993, twenty Pizza Hut corporations filed two virtually identical
lawsuits against defendant Woodward in the Eastern and Middle Districts of
North Carolina. The complaints, which eventually were consolidated into one
case in the Eastern District, sought declaratory relief regarding the parties'
respective rights under two Stock Redemption Agreements, specific
performance, and damages for breach of contract. The inability to join
necessary parties forced the plaintiffs to abandon their claims for damages and
specific performance.

The agreements at issue provided for the redemption of a deceased

shareholder's stock in each of the plaintiff corporations either by the remaining
shareholders or by the corporations themselves. The documents established that
the stock would be transferred at a value previously agreed to by the
shareholders during periodic evaluations. The agreements also stated that a
deceased shareholder's estate need not accept the price established at any
evaluation conducted more than eighteen months prior to the shareholder's
death. Despite the fact that Philip Woodward agreed to a stock price less than
eighteen months before he died, his estate refused to accept as insufficient that
amount from the plaintiff corporations. Had it done so and the transaction been

consummated pursuant to the agreement, the deal presumably would have

closed by January 6, 1993.
4

On February 15, 1994, the district court granted summary judgment in favor of
the plaintiffs in both actions, holding that the Woodward estate was obligated to
transfer the stock for consideration in the amount of $5,049,114. Joint
Appendix at 363-68. The court found that the "[d]efendant repudiated the
Agreement based on the assertion that this valuation was improper." Id. at 366.
On that basis, the court denied defendant's motion for pre-judgment interest: "
[H]aving wholly repudiated the Agreements at the time of redemption ...
[defendant] cannot now demand the benefits that would have flowed to her
from the consummation of the transaction." Id.

The parties disagree about what transpired next. Essentially, Woodward claims
that the plaintiffs stonewalled in transferring the money in accordance with the
court's judgment. The plaintiffs maintain that the terms of the Stock
Redemption Agreements required them to obtain approval from Pizza Hut, Inc.,
which was not forthcoming because of a dispute over whether the estate's stock
in some related pizza delivery operations (known as the "Delco stores") would
be included in the transfer. Another lawsuit between the parties over the issue
of the Delco stores was filed. Each party blames the other for the failure to
obtain the requisite approval from Pizza Hut, Inc.

On July 19, 1994, Woodward sought a show cause order or supplemental relief
pursuant to 28 U.S.C. Sec. 2202 on the ground that plaintiffs had not yet
completed the transfers as ordered by the trial court. On July 28, 1994, the
plaintiffs' counsel requested approval from Pizza Hut, Inc., for the transfer of
the estate's stock, with the exception of the Delco shares. Pizza Hut, Inc.,
eventually approved the transfers. On September 2, the plaintiffs tendered a
down payment and promissory note according to the terms of the court's
February 15 judgment, and the ownership of the stock was transferred to them.

At a September 7 hearing on Woodward's motion for supplemental relief, the

trial court explained the intention behind its February 15 order: "Ownership of
the stock ought to go to the plaintiffs as of that date and the payment to the
defendant[ ] would be made as of that date and the interest ought to run on that
payment from that point in time on." Joint Appendix at 916. In an order issued
on September 28, the court found that the plaintiffs were entitled to the
incidental benefits of stock ownership as of February 15. Likewise, the court
concluded that the estate was entitled to interest at the standard postjudgment
rate of 3.74% on the insurance proceeds to be applied to the stock transactions,
as well as interest at the contractually prescribed rate of 10% on the remainder

of the amount owed. Finally, the court modified its February 15 order by
striking the statement that the defendant had repudiated the agreement and was
not entitled to prejudgment interest on that basis. Joint Appendix at 968, 984.
8

The plaintiffs filed a timely notice of appeal from the court's order, and
Woodward cross-appealed from the district court's finding that the plaintiffs
were entitled to the incidents of stock ownership after February 15, 1994. The
district court had jurisdiction over this matter pursuant to 28 U.S.C. Secs. 1332
and 2201. Appellate jurisdiction is proper under 28 U.S.C. Sec. 1291.

II.
9

On appeal, the plaintiffs attempt to collapse the distinction between entitlement

to pre- and post-judgment interest. They argue that the district court's award of
post-judgment interest pursuant to 28 U.S.C. Sec. 1961(a) was improper
because of Woodward's initial unwillingness to close the transfer.1 We review
de novo the application of the statutory requirements of the Declaratory
Judgment Act. Insurance Services of Beaufort, Inc. v. Aetna Casualty & Surety
Co., 966 F.2d 847, 851 (4th Cir.1992).

10

Section 2202 of title 28 of the United States Code provides: "Further necessary
or proper relief based on a declaratory judgment or decree may be granted after
reasonable notice and hearing, against any adverse party whose rights have
been determined by such judgment." This provision "clearly anticipate[s]
ancillary or subsequent coercion to make an original declaratory judgment
effective." Horn & Hardart Co. v. National Rail Passenger Corp., 843 F.2d 546,
548 (D.C.Cir.), cert. denied, 488 U.S. 849 (1988). As the D.C. Circuit has
recognized:

11
Section
2202's retained authority, commentators have noted "merely carries out the
principle that every court, with few exceptions, has inherent power to enforce its
decrees and to make such orders as may be necessary to render them effective."
12

Id. at 548 (quoting Borchard, DECLARATORY JUDGMENTS 441 (2d

ed.1941)); see also Edward B. Marks Music Corp. v. Charles K. Harris Music
Publishing Co., 255 F.2d 518, 522 (2d Cir.), cert. denied, 358 U.S. 831 (1958)
(noting that a declaratory judgment may be supplemented by either damages or
by equitable relief). In the case before us, there is evidence that the plaintiffs
delayed in complying with the court order of February 15. Furthermore, as the
district court observed, both parties agreed that a resolution of the time at which
the stock was to be transferred was "necessary to the parties' ability to
effectively resolve and consummate the financial transactions involved herein."

Joint Appendix at 973. Thus, the district court's award of post-judgment interest
was necessary and proper within the meaning of Sec. 2202.
13

Regarding plaintiffs' argument that the district court erred by not conducting an
evidentiary hearing prior to issuing its September 28 order, we have required an
evidentiary hearing on the issue of supplemental relief under Sec. 2202 where
there is neither "a hearing or sufficient evidence in the record," see Insurance
Services of Beaufort, 966 F.2d at 853. In this case, however, such a hearing was
unnecessary, because the parties had argued the earlier motions for summary
judgment and had offered significant evidence prior to the court's decision. Cf.
id. at 853 n. 4 ("A subsequent hearing may not always be required where the
factual issues concerning such further relief are sufficiently developed at trial,
because the parties would have had their hearing at trial.").

14

The plaintiffs also object to the particular interest rate chosen by the district
court, noting that if the award were a proper one under Sec. 1961(a), the rate
should have been the one established by that statute. We disagree, and instead
adopt the view expressed by the Fifth Circuit in Hymel v. UNC, Inc., 994 F.2d
260 (5th Cir.1993): "[W]hile 28 U.S.C. Sec. 1961 provides a standard rate of
post-judgment interest, the parties are free to stipulate a different rate,
consistent with state usury and other applicable law." Id. at 266. In this case,
the district court appropriately utilized the statutory rate for the interest on the
insurance proceeds, about which the parties' contract was silent. Because "the
contract governs the rate of interest," id., the court applied the rate set forth in
the Stock Redemption Agreement to the promissory notes paid in consideration
of the stock. In sum, the district court acted within its powers under the
Declaratory Judgment Act in granting plaintiffs "further relief."2

III.
15

On cross-appeal, Woodward contends that the estate is entitled to the incidental

benefits pertaining to stock ownership during the period from February 15
through the dates of the stock's transfer. As the district court recognized, it is
inequitable for the plaintiffs to have gained the benefit of both the stock and the
money during the post-February 15 period. Because we have awarded postjudgment interest to the defendant, however, the estate effectively received the
benefit of the funds paid in consideration of the stock. Because it likewise
would be inequitable for the estate to reap a comparable windfall by receiving
benefits from both the stock and the purchase money during that period, we
reject Woodward's argument, despite the plaintiffs' apparent reluctance to
comply with the court's February order. The district court was in a better
position to weigh the equities and to determine whether the plaintiffs

effectively should be punished by losing both the financial benefits of the stock
and the purchase money. Based on the record before us, we find no reason to
reject the lower court's reasoned judgment on this issue.
IV.
16

Accordingly, the judgment of the district court is, in all respects,

17

AFFIRMED.

Responding to the plaintiffs' argument that the court's February 15 order was
not a money judgment, pursuant to which an award of postjudgment interest
would be proper, we note that such a judgment must contain two elements: "(1)
an identification of the parties for and against whom judgment is being entered,
and (2) a definite and certain designation of the amount which plaintiff is owed
by defendant." Penn Terra, Ltd. v. Department of Environmental Resources,
733 F.2d 267, 275 (3d Cir.1984). Both are present in this case

Because the district court's actions were authorized under 28 U.S.C. Sec. 2202,
we need not address whether the district court's actions also were permissible
under Rule 60(b) of the Federal Rules of Civil Procedure. Also, we do not
decide whether the lower court's modification of its earlier factual finding of
repudiation is barred by the doctrine of collateral estoppel, in light of our view
that the district court properly awarded supplemental relief authorized by the
Declaratory Judgment Act. The court's previous finding, and any preclusive
impact that it might have, only affects the parties' rights during the period
between January 6, 1993, and February 15, 1994